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BUSINESS confidence in Asia rose to a three-year-high in the second quarter of the year, propelled by a slew of favourable economic data across the region and easing concerns over the health of China's economy, a Thomson Reuters/INSEAD survey showed.
The Thomson Reuters/INSEAD Asian Business Sentiment Index, representing the six-month outlook of 101 firms, climbed to 74 in April-June from 70 three months earlier. A reading over 50 indicates a positive view. Singapore posted the lowest subindex of 62 in the survey.
The boost in business confidence was propelled by an abundance of favourable economic data across the region and easing concerns over the health of China's economy, the study said.
"The world economy is starting to look more solid," said Singapore-based economics professor Antonio Fatas at global business school INSEAD. "The US is reaching good levels of GDP and employment, with Europe finally recovering and Asia seeing less risks ahead. China looks like it's in a more stable situation after having ups and downs because of capital outflows over the last couple of years and also the risks of a debt crisis."
China is widely expected to meet its 6.5 per cent economic growth target this year, helped by a pick-up in exports and stable growth in factory output and retail sales. The government has also sought to reduce debt.
Reflecting the upbeat picture, the country upon which much of Asia depends for trade scored a business sentiment subindex of 75, up from 72 three months prior.
Sentiment for Japan hit its highest-ever with a subindex of 83, compared to 61 in the previous quarter and an average of 58 in the survey's eight-year life. The country's central bank in April offered its most optimistic assessment of the economy in nine years, saying it was turning towards expansion.
Indonesia's buoyant consumer confidence and export growth that exceeded initial estimates helped its sentiment subindex rise 8 points to 83, its highest in over a year.